2. Creating the Management System

3. Why You Need A Management System It serves the company in the following ways –It is a set of tools to help Owner manage sales –It is a set of tools to help Owner monitor operating cost –It provides the means to continuously improve –It adds profit to the bottom line –It frees the Owner to delegate and monitor results

4. Management System FORECASTING - PLANNING ASSIGNING EXECUTING - FOLLOW-UP REPORT - REVIEW VARIANCE

5. Management Elements FORECASTING: Establish business vision Setting goals and expectations that are –defined –communicated –quantified Review current and past performance to improve systems and ensure profitability

6. Management Elements PLANNING - ASSIGNING Determines a course of action Clear expectation of how activities, resources and energy will be used Utilization of resources to attain goals within a time-frame and quality and quantity standards

7. Management Elements IMPLEMENT – FOLLOW-UP Managing the plan Reacting immediately to variances Inspection / audit phase of the system Assure compliance to the plan Identify potential problems and initiate corrective action Requires constant feedback

8. Management Elements REPORT & REVIEW Communicating results on a timely basis Analysis conducted after results are reported To better forecast and plan Make necessary changes in future activities

9. Management System FORECASTING - PLANNING ASSIGNING EXECUTING - FOLLOW-UP REPORT - REVIEW VARIANCE

10. What are the Management Parts? ORGANIZATION DESIGN OPERATIONAL PRODUCTIVITY SALES & MARKETING RESULTS FINANCIAL PERFORMANCE

11. ORGANIZATION & OPERATIONS Job descriptions Functional Organization Task and Duties Capacity planning Questionnaire Recruiting Employee Turnover Employee Handbook Incentive Structure Coaching

12. Operations & Organization Job Description Task Duties List Measurable Evaluation Job Monitor Pareto Analysis Opportunity Log Daily Action List Weekly Operating Report Daily Operating Report Weekly Management Report Weekly Pareto Analysis Key Performance Indicators Forecast Trends Capacity Planning Production Schedule CIP ’ s Continuous Improvement Process Method Changes Activity Changes Financial Master Budgets Performance Evaluation ForecastPlan - AssignImplement -Follow-UpReport -Review

13. SALES & MARKETING SALES BUDGET MARKETING BUDGET PROMOTIONS ADVERTISING SALES TRAINING INCENTIVIES MARKETING REVIEW COMMISIONS Current target markets Untapped Markets Sales Control Telemarketing Sales agreements

14. Sales BudgetSales ManpowerSales Calls Sales Management Report Sale Incentives Key Performance Indicators Forecast Trends Sales Planning Market Planning CIP ’ s Continuous Improvement Process Method Changes Activity Changes Forecast - PlanAssignImplement -Follow-UpReport -Review Marketing Budget Sales Training SALES PERFORMANCE SYSTEM

15. FINANCIAL PERFORMANCE LABOR BURDEN ACCOUNTS RECEIVABLE COST OF GOODS SOLD INCOME STATEMENT BUDGETS BALANCE SHEET ACCOUNTS PAYABLE OVERHEAD VARIANCES Job Costing ACCOUNTS RECEIVABLE Daily / Weekly Operating Report

16. Financial System Accounts Payable Accounts Receivable Labor Burden Break-Even Cash FlowVariance Report Weekly Status Report Income Statement Cost of Goods Sold Balance Sheet Chart of Accounts Profit Centers History Review CIP ’ s Continuous Improvement Process Method Changes Activity Changes ForecastPlan - AssignImplement -Follow-UpReport -Review Overhead

17. MANAGEMENT SYSTEM REVIEW A management system enables managers to: –PLAN What has to be done? How long it will take? What resources are required (manpower, machines, skills, equipment, energy)? –ASSIGN Who does what? When? Each function is a portion of a synchronized overall plan. Control the whole by managing the parts. –EXECUTE /FOLLOW UP Monitor performance in relation to expectations. Identify and correct off-schedule conditions. Solve variance problems. –REPORT / REVIEW Attainment. Performance. Exception

18. What is the Owner's Role? Run the Management System By: –Recruit & select the best people –Set company goals and assign responsibility and authority –Demand financial performance –Measure and improve

19. Management System FORECAST / PLAN ASSIGN EXECUTE - FOLLOW-UP REPORT - REVIEW VARIANCE

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